Report: Volvo to cut dealer network, U.S. corporate operations

Things at Volvo haven't been going well for some time and the higher-ups at the brand are finally beginning to recognize that sacrifices have to be made. Sales of the Swedish marque have steadily declined since 2004, with an average of 400 new vehicles being sold at each of the 350 Volvo franchises, and Anne Belec, CEO of Volvo's North American sales operations, expects another serious decline – around 10- to 15-percent – in 2008. That means cuts are on the horizon, for both dealers and Volvo's U.S. corporate operations alike.
The first move will be to pair down Volvo's Stateside dealer network in an effort to match demand with the sales infrastructure. Volvo intends to make it a voluntary effort, but if dealers don't step up for themselves, Volvo has a "plan in place" to "craft a way out." Read into that whatever you choose.

On the product side of the equation, Volvo will begin to shy away from smaller vehicles, like the S40, V50 and S60 and focus more on its larger lineup, including the S80, XC60 and V70. There was no mention of Volvo's newest entrant into the hatch segment, the C30, but if scaling back compact vehicles is in the cards, that might leave future iterations – including a four-door variant – on the drawing board.

Despite all of this, the one thing that seems to be plaguing Volvo is a lack of brand identity. The Automotive News interview with Belec categorizes Volvo as a "luxury brand," something that Ford has been trying to hype in recent years. "Luxury" is a far cry from Volvo's original identity of manufacturing the world's safest vehicles, and with far more competitive offerings coming from Audi, BMW, Lexus and Mercedes-Benz, it's no wonder the Volvo is floundering considering its lack of focus on what it does best.

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